Part 2 on Some Highlights of The New South Carolina Uniform Power of Attorney Act

There are new laws in South Carolina dealing powers of attorney. This will certainly impact how estate planners and others draft a power of attorney moving forward. Estate planning lawyers will be aware of it in creating a Healthcare Power of Attorney or a General Durable Power of Attorney. A logical question is what happens to the power of attorney I already have in place? There are two things to think about. The first is what the law says. The second is whether a third-party will accept it. Ultimately, it will depend on what was drafted, when, where, and how it is to be used.

Here are some more reader-friendly thoughts on the new law:

New Definitions

There are new terms and definitions used. For example, you won’t see the word “disability” anymore because it is too broad. It is replaced by “incapacity”. Someone can be disabled but still be perfectly capable of handling his or her own affairs. Often, the idea is to have the agent step in when a person can no longer conduct his or her business. The new term fits that thinking.

Another example is the person the power is given to is an “agent”. The term used to be “attorney in fact” which was confusing.

Durability

A power of attorney that is still effective after incapacity is “durable”. Durability is important to avoid a conservatorship or guardianship proceeding. Frequently, it is the entire point of creating the power of attorney. It used to be that the power of attorney had to specifically state it was intended to be durable. The new rule is that a power of attorney is durable by default. In other words, if it is silent on the issue then it is durable.

Signing Requirements

The signing requirements have not changed. The same South Carolina formalities are in place.

Portability

People are moving from state to state more often. It makes sense that a new place of residence should recognize a power of attorney made in a prior state. The act promotes this by recognizing powers of attorney validly executed in another state. The result is the same for a military power of attorney. It also seeks to use the law in place where and when the power of attorney was created. However, a practical problem is whether a third-party will accept a power of attorney in a form they are less comfortable with.

A “Springing” Power of Attorney

Normally, a power of attorney is effective when executed. A “springing” power of attorney is different. It specifies some event (like incapacity) that must happen before it is effective. That is when the agent gets authority. Until that time, the agent cannot act. The difficulty is showing that the person is incapacitated by documentation that might be protected by HIPAA. The act solves this by a grant of HIPAA authority in certain cases.

Termination

You can probably guess certain events that will terminate a power of attorney. One worth mention is the revocation by divorce rule. It is also interesting that passage of time alone will not make the power of attorney “stale” and ineffective.

Agent Acceptance of Power

There is a noteworthy development here. An agent accepts appointment by exercising power, performing duties, or some other conduct indicating acceptance. That is the default rule that can be changed in the power of attorney itself. What exactly does it mean? It is probably best to be clear about that in drafting the power of attorney.

 

Up Next: Part 3 of this Article

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